It often feels like doom and gloom when talking about fraud, but the latest fraud figures from UK Finance show there is some light in the fight against fraud and scams. In this blog, I’ll give an overview of the numbers concentrating on remote payments and APP frauds as well as the recent UK Government fraud strategy.  

Key points  

• Overall fraud loss number £508m down 2% on H1 2022  
• Banks and PSPs prevented £650.7m of unauthorised fraud 
• Remote Banking Fraud losses flat at £78.9m 
• Authorised Push Payment (APP) Fraud losses down 1% 

So the downward trend of 2022 continues from the Covid era highs. 

Let’s dig a little deeper 

There are three main areas of fraudⁱ in the UK report, so let’s cover those in turn concentrating on remote banking and authorised fraud and scams. 

Card Fraud (Unauthorised) 

• Card fraud down 4% to £258.9m, from lowest half years since H1 2015 
• Fraud to turnover ratio (bps) has continued to decline to 6.5bps H1 2023 vs H1 2022 as card usage has increased  
• Case volumes down 9% to 2.6m 

Remote Banking Fraud (Unauthorised) 

• Losses flat at £78.9m  
• Cases down 29% to 18,308 
• Prevented fraud up 12% to £99m 
• Mobile Losses increasing, twice as fast as cases volumes – due to increasing use of mobile banking over telephony and internet banking. 

Clear shifts in channel usage by genuine customers which is then reflected in how the fraudsters attack, but overall fraud is flat. 

The prevention rate has increased again to 55% showing improvement again, as attack level has increased in mobile. 

APP Fraud (Authorised) 

• Losses reduced by £1.4m, 1% to £239.3 
• Cases up 22% to 116,324 so the attack level is still increasing yet prevention & detection improved. 
• Personal/business split at £196.7 vs £42.6, Businesses still likely underreporting 
• Customers had 63% of funds returned although mostly refunds rather than a return of their funds, but this continues to increase. 

As discussed here most cases start online, with banks reporting online as the source in 77% of cases, telcos 18% and email 1% and others 5% What is interesting is how this changes for values at 32%, 45% and 11% & 12% respectively. There are only minor changes here since the last report. 

Therefore, the average value for online cases are lower than via telcos as many of these are lower value purchase scams. Email has the highest average loss per case as value is nearly six times the volume. 

What do the numbers tell us that’s interesting? 

• Investment in systems and controls is working, leading to continued, all be low digit decrease in fraud & scams 
• Areas without investment focus have been increasing e.g. F2F cards and card ID Theft 
• Covid impacts are out of the numbers, apart from the permanent shifts to digital, mobile and higher contactless 

This report shows that the attack level for APP is still very high and that the enablers are still there, namely the levels of compromised and continually compromised data and online platforms and telcos. 

We are continuing to see the UK regulatory framework, through both regulatory fines & financial through increase liability are having a positive effect in terms of incentives for financial services players to invest as shown by the continuing downward trend. 

However, as I pointed out here, some firms are doing much more than others and there is clearly more work to take forward. 

It is therefore important for firms to invest where items can make the most difference and where they can be easily leveraged across products, channels and risk types.  

A key area for investment is in improving the ability of customers to report fraud and scams quickly and easily, fast onward reporting to beneficiaries and law enforcement along with data sharing to improve intelligence to disrupt the fraudsters ability to utilise mule accounts.